Telecoms troubles

The discussions between Cisco and Nortel Networks and the fraud charges brought against the ex-CFO of Network Associates dominated the international world of IT and telecommunications last week.

At home, the CS Holdings saga, Thintana`s proposed sell-off of almost half its 30% stake in Telkom, and the likely delay in the ongoing second national operator (SNO) process stole most of the local ICT headline space.

* We saw excellent year-end numbers from Real Africa Holdings (net profit up over tenfold but no revenue figures);
* Mediocre year-end figures from arivia.kom (revenue up but profits down) and Eureka Industrial (revenue down but back in the black);
* The JSE notice re Casey`s late submission of its annual financial statements; and
* The de-listing of Cycad`s shares.

Other local news included:

* A share re-purchase announcement from Digicore;
* EOH`s withdrawal from a possible CS Holdings acquisition and the announcement from the latter that it has nominated a preferred bidder for the company and is in the finalisation process of a deal with Bytes Technology Group;
* The appointment of Ndaba Ntsele as non-executive chairman of Digicore Holdings;
* Thintana will sell up to nearly 50% of its 30% shareholding in Telkom SA;
* The further delay to the setting-up of the SNO following a renewed legal challenge to the minister`s decisions re the participating consortia; and
* The UCS Group is planning to split into two entities with one listing on a foreign exchange within three years and the other continuing on the JSE.

New local distributorships included that of Embarcadero Technologies by Sybase, TallyCom by Big 5 Distribution and Trapeze Networks by Channel Data.

On the African scene, the launch of Intelsat`s latest satellite was specifically positioned to serve the continent, which is the fastest growing area globally in the use of satellite technology.

On the African scene, the launch of Intelsat`s latest satellite was specifically positioned to serve the continent.

Paul Booth, MD, Global Research Partners

* We saw the name change of IPVoice Comms to NewMarket Technology;
* The merger of Alcatel`s and Finmeccanica`s satellite operations to create Europe`s largest satellite group; and
* The news that the Securities Exchange Commission has brought fraud charges against the former CFO of Network Associates, Prabhat Goyal.

International strategic partnerships were announced between RSA Security and Passlogix.

Additionally, look out for the outcome of partnership talks between Cisco and Nortel Networks.

Other international news included:

* The appointments of Larry Asten as president of Telco Systems, Ed Colligan as president of palmOne, David Hicks as CEO of Nematron, Paul Stodden as chairman of Debitel AG, and Jane Warner as president of Plexus Systems;
* The resignation of Paul Stodden as CEO of Siemens Business Systems;
* The retirement of William Zadel as CEO of Mykrolis; and
* A job loss announcement from Sprint.

We saw excellent* figures from AML Comms (back in the black), IDC (back in the black) and Red Hat; and very good* numbers from Adobe Systems, Entegris, Jabil Circuit, RF Monolithics (back in the black), SAIC, SMSC and Spectrum Controls.

Good figures* were recorded by Advanced Photronix (back in the black), AIT (back in the black), Cohesant Technologies, Euroweb International (back in the black) and Progress Software; and satisfactory* figures were posted by Bouygues (back in the black), Financial Models (back in the black), LML Payment Systems and Oracle.

Mediocre* returns came from Actuant, Mosaid Technologies (but back in the black), Navtech, Radstone Technology and Tibco Software; while very poor results* came from Manchester Technologies.

Losses* were reported by Comarco, e-SIM, Eltek, Energis Comms, Forgent Networks, Infonet Services, NaviSite, Norstan, Prosoft Training, Saba Software, Solectron and Teleglobe.

Other financial news included analyst upgrades for Accenture, Corning, Jabil Circuit, Net2Phone, Novell, Pixar and Stellent; analyst downgrades for ePlus, Emmis Comms, Entercom Comms, Motorola, Red Hat, Sonic Innovations and Syntel; share offerings from Au Optronics and Catalyst Semiconductor; private funding obtained for ARIO Data Networks, Finjan Software, Mahi Networks, Mitek Systems, SiNett and Vocalocity; and share buy-back announcements from Boston Comms Group, Gartner, Keane and TDS.

There were negative results/profit warnings (often veiled) from Eidos, Misys, Parity, RF Monolithics, SimpleTech and Sonic Innovations; a very good IPO from Blackboard, but a disappointing IPO from Leadis. Additionally, Veritas Software has re-stated its financial statements for 2001, 2002 and 2003.

Locally

Business Connexion (-7.8%)
CS Holdings (+25%)
Elexir (+200%)
Global Technology (+100%)
Labat Africa (-13%)
MTN (-7.3%)
Stella Vista (+50%)
Telkom (-6.1%)
Trematon (-15.4%)
Zaptronix (+50%)

Internationally

Auspex Systems (-37.1%)
Commerce One (-18.9%)
Cognizant Technology (-46.7%)
Future Internet (+30.3%)
Genus (+24.3%)
IDN Telecom (-21.9%)
Microtune (+30%)
Network Technology (+40%)
Red Hat (-21.7%)
Telewest Comms (-21.7%)

In terms of indices, Nasdaq was down 0.7% and the JSE down 0.2% for the week.

The latest BusinessWeek contains its Information Technology 100 ratings for 2004, a list which contains many surprises and looks very different from last year`s ratings.

The top five for 2004 are LG Electronics (was number 67), America Movil (was 35), Quanta Computer (was 34), Hon Hai Precision Industries (was eighth) and Nextel Comms (was last year`s number one). Significant movers included Intel at 13 (was 82), TPV Technology at 14 (was 95) and newcomers Au Optronics at 17 and Novatek Microelectronics at 20, while Nokia (was fifth) and Vodafone (was ninth) have dropped out of the list completely.

Another interesting statistic is that only six US companies are in the top 25.

* NB

Guidelines for the categorisation of results are as follows and are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

* Excellent: Both revenue and net income growth in excess of 50%.
* Very good: Both revenue and net income growth in excess of 25%.
* Good: Both revenue and net income growth in excess of 10%.
* Satisfactory: Revenue is within 10% of previous year and net income is up.
* Mediocre: Either revenue and/or net income is down.
* Very poor: Net income is less than 1% of revenue.
* Loss: A loss has been recorded.